Dec. 15, 2013 6:49 p.m. ET
Welcome to the health-insurance ad wars.
A malfunctioning HealthCare.gov website and confusion over canceled policies have kept millions of Americans from choosing new health plans so far this fall. But with website access improving and the initial deadline to sign up for coverage looming Dec. 23, insurers are starting to blanket the airwaves and social media with glitzy ads urging consumers to buy their plans.
WellPoint Inc. WLP -1.06% WellPoint Inc. U.S.: NYSE $87.75 -0.94 -1.06% Dec. 13, 2013 4:00 pm Volume (Delayed 15m) : 2.17M AFTER HOURS $88.09 +0.34 +0.39% Dec. 13, 2013 4:42 pm Volume (Delayed 15m): 50,349 P/E Ratio 9.42 Market Cap $25.92 Billion Dividend Yield 1.71% Rev. per Employee $1,588,020 12/15/13 Health Insurers Crank Up Ad Sp... 11/19/13 WellPoint CEO Says Obamacare S... 10/23/13 WellPoint Remains Wary in Face... More quote details and news » —which has held off for weeks on a planned campaign as problems with the website made it impossible for many consumers to sign up— said it expects to spend up to $100 million by the end of this year on TV, social media and print ads targeting mostly young and healthy people—the consumers it covets most because their premiums will help offset the medical costs of older, sicker policyholders.
In one ad, a stay-at-home mother named Ana cuts watermelon with her daughter and walks in her neighborhood with her husband. "The moment I started taking my health care more seriously was when I became a mom," Ana says. "So health insurance has become a must."
"We know that if consumers don't like what they see, they'll go spend their money elsewhere," said Patrick Blair, who runs marketing for WellPoint.
Insurers such as WellPoint are capitalizing on an unprecedented opportunity in a shifting health-care market. Some seven million Americans are expected to buy health coverage on the new consumer exchanges, where people can compare insurance plans side by side. On top of that, more companies such as Walgreen Co. WAG -0.94% Walgreen Co. U.S.: NYSE $57.01 -0.54 -0.94% Dec. 13, 2013 4:03 pm Volume (Delayed 15m) : 4.20M AFTER HOURS $56.95 -0.06 -0.11% Dec. 13, 2013 4:58 pm Volume (Delayed 15m): 33,376 P/E Ratio 22.01 Market Cap $54.14 Billion Dividend Yield 2.21% Rev. per Employee $291,198 12/05/13 Rite Aid Same-Store Sales Up 2... 11/22/13 S.C. Johnson Pulls Kiwi Mink O... 11/03/13 Walgreen Looks Abroad for Grow... More quote details and news » and International Business Machines Corp. IBM -0.33% International Business Machines Corp. U.S.: NYSE $172.80 -0.57 -0.33% Dec. 13, 2013 4:01 pm Volume (Delayed 15m) : 4.13M AFTER HOURS $172.80 0.00 0.00% Dec. 13, 2013 7:13 pm Volume (Delayed 15m): 55,105 P/E Ratio 11.88 Market Cap $187.64 Billion Dividend Yield 2.20% Rev. per Employee $233,407 12/13/13 IBM's Retiring CFO Scores Rich... 12/13/13 Retiring IBM CFO Mark Loughrid... 12/12/13 Survey: IT Spending Growth for... More quote details and news » are sending employees or retirees to privatized insurance exchanges to choose their own plans.
The federally run online exchange has seen a surge in traffic since the Obama administration declared the website to be mostly fixed, with millions of visitors and more than 137,000 enrollments processed as of Dec. 1, according to the Centers for Medicare and Medicaid Services.
Paramount Insurance Co., a regional insurer from Maumee, Ohio, delayed a media campaign it had planned to start in late September. It debated in daily briefings when to launch the marketing efforts, said Jack Randolph, president. Finally last month, the company pressed forward with social media ads and 30-second spots in movie theaters, worried that it couldn't wait any longer.
"We didn't want to come in too late to the game," Mr. Randolph said. "You need that repetition for your brand to have an ingrained and implanted message with consumers."
The coming blitz of insurance ads will be a step up from an already heated-up marketing push. Health insurers, state-run exchanges and the federal government spent $194 million on ad buys with local TV stations between Oct. 1 and Nov. 10, according to Kantar Media, which tracks insurance advertising. That isn't far below the $216 million spent by insurers in all of 2012, according to an analysis of the Kantar Media data done by TVB, a trade association for local commercial broadcasters.
The enrollment surge has compelled some insurers to snap up TV ad time, said Scott Roskowski, director of business development at TVB. "It's already very noticeable that the December pace has begun to pick up" with insurer advertising, Mr. Roskowski said.
TVB projects that insurers will spend about $500 million on ads on local TV stations in 2014.
The ad campaigns are a major shift in strategy for health insurers, most of whom have never really had to market directly to consumers aggressively until now. Most in the past sold plans to companies and human-resource directors for their workforces.
Little wonder that health insurers score among the worst performers in the American Customer Satisfaction Index, which measures nearly 50 industries. They rank at the bottom of the list, along with cable companies, airlines and telecommunications firms.
"It's not been a relationship, from a consumer side, that's been all that positive," said David VanAmburg, managing director of the ACSI.
Insurers need to win over people like Dennis Dwight, a 55-year-old mortgage broker from Dove Canyon, Calif., whose current plan from Anthem Blue Cross terminates at the end of the year. All the insurers more or less look the same to me," said Mr. Dwight, who is self-employed. "So, I'm very open to hear what they have to say."
Some insurers have enlisted seasoned former marketing executives from consumer-product companies to help them develop and promote their brands. Cynthia Rolfe once marketed Procter & Gamble Co. PG +0.09% Procter & Gamble Co. U.S.: NYSE $82.37 +0.07 +0.09% Dec. 13, 2013 4:00 pm Volume (Delayed 15m) : 7.18M AFTER HOURS $82.22 -0.15 -0.18% Dec. 13, 2013 7:42 pm Volume (Delayed 15m): 260,085 P/E Ratio 19.95 Market Cap $223.90 Billion Dividend Yield 2.92% Rev. per Employee $699,446 12/15/13 Ahead of the Tape: Profit Warn... 12/13/13 In Japan, Scented Fabric Softe... 12/03/13 Chobani Hires P&G Divisional F... More quote details and news » 's skin-care and household products, and helped devise ad campaigns for products such as Revlon eyeliner and lipstick. Now she is vice president of consumer brand strategy for the Blue Cross & Blue Shield Association.
This year she led the development of an ad campaign urging consumers to "Live Fearless." The ads highlight how having health insurance affords people security and allows them to have fun. A young child narrates one ad, highlighting that Blue Cross & Blue Shield is accepted by more than 90% of doctors and specialists. And carrying the insurer's card "opens doors in all 50 states, giving you the freedom to love, to dream, to dance—like no one is watching," the young child says.
"It's a very positive campaign, very upbeat," Ms. Rolfe said.
Some 16 Blues plans have been using the ads this fall to build their brand images, and now are adding their phone numbers and website addresses to the spots.
Other companies also ran brand-building ads this fall, trying to reach healthier consumers. Aetna Inc. AET -0.18% Aetna Inc. U.S.: NYSE $65.02 -0.12 -0.18% Dec. 13, 2013 4:00 pm Volume (Delayed 15m) : 2.76M AFTER HOURS $64.17 -0.85 -1.31% Dec. 13, 2013 6:41 pm Volume (Delayed 15m): 22,670 P/E Ratio 13.11 Market Cap $23.89 Billion Dividend Yield 1.38% Rev. per Employee $1,293,440 12/15/13 Health Insurers Crank Up Ad Sp... 10/29/13 Morning MoneyBeat: Bulls Juice... 10/29/13 Aetna Profit Rises as Membersh... More quote details and news » brought in advertising giants WPP WPP.LN +1.17% WPP PLC U.K.: London GBp1300.00 +15.00 +1.17% Dec. 13, 2013 4:35 pm Volume : 2.80M P/E Ratio 0.21 Market Cap GBp17.49 Billion Dividend Yield 1.62% Rev. per Employee GBp92,715.5 12/15/13 Health Insurers Crank Up Ad Sp... 10/16/13 Publicis Says Omnicom Merger R... 10/06/13 Tweets Provide New Way to Gaug... More quote details and news » PLC's Ogilvy & Mather and Interpublic Group IPG -1.08% Interpublic Group of Cos. U.S.: NYSE $16.50 -0.18 -1.08% Dec. 13, 2013 4:01 pm Volume (Delayed 15m) : 3.58M AFTER HOURS $16.50 0.00 0.00% Dec. 13, 2013 4:28 pm Volume (Delayed 15m): 49,093 P/E Ratio 18.33 Market Cap $6.87 Billion Dividend Yield 1.82% Rev. per Employee $163,115 12/15/13 Health Insurers Crank Up Ad Sp... 12/08/13 Ad Spending Expected to Pick U... 11/05/13 JWT Hires Gustavo Martinez as ... More quote details and news » of Cos.' UM to help it develop a "What's Your Healthy?" TV campaign running in prime-time slots in several local markets. The ads were meant to appeal to people who want to take an active role in managing their health. In one TV ad, a heavyset man managing high blood pressure is shown dancing, doing swim aerobics and resisting a midnight snack. "It's staying fit, it's staying motivated, it's staying on track," the man says.
A Cigna Corp. CI -1.22% Cigna Corp. U.S.: NYSE $83.25 -1.03 -1.22% Dec. 13, 2013 4:00 pm Volume (Delayed 15m) : 1.13M AFTER HOURS $83.50 +0.25 +0.30% Dec. 13, 2013 7:23 pm Volume (Delayed 15m): 10,280 P/E Ratio 15.39 Market Cap $23.01 Billion Dividend Yield 0.05% Rev. per Employee $887,179 12/15/13 Health Insurers Crank Up Ad Sp... 10/31/13 Cigna Reports Higher Profit, O... 10/11/13 J.P. Morgan's Legal Reserves A... More quote details and news » ad running in Texas, Florida and other key markets features a female jogger on a nature trail, out of breath and hunched over, her hands on her knees. A few piano chords underscore her fatigue.
As the guitar riffs and drumbeats begin to crescendo, the woman finds her second wind and is soon at full stride. A deep voice booms Cigna's tagline: "Believe in yourself. We do. Go You."
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